Concerns remains over the market for audit despite perceived improvements in audit quality, according to a report from the UK’s financial watchdog, the Financial Reporting Council (FRC).
Research conducted for the FRC shows that confidence is growing in audit but recent corporate failures and increased public scrutiny have undermined some of the process.
The FRC said work needs to be done on improving market competition and good practice.
Melanie McLaren, the FRC’s executive director for audit, said: “Our vision for audit is that it is trusted to provide reliable assurance on the public reporting of financial information, and in doing so, promotes good governance and facilitates the effective allocation of capital.
“The FRC’s strategy is to promote continuous improvement in audit quality. One of the key factors in achieving this is to engage with other regulatory professional bodies, auditors, audit committees and investors to communicate good practice.”
In 2015/16 the FRC concluded that 77% of FTSE 350 audits reviewed required no more than limited improvements. The FRC is aiming for that figure to rise to 90% in the period 2016/19.
For more coverage of the FRC report click here.